Mortgage approvals hit highest level since 2007
Figures from the Bank of England (BoE) show that mortgage approvals rose to 818,500 in 2020, exceeding the 789,100 recorded in 2019 and hitting the highest level since 2007. While the first nationwide coronavirus lockdown prompted a slump which saw fewer than 9,400 mortgage approvals in May, an all-time low, 103,381 loan applications were approved by banks and building societies in December, with a surge in activity in H2 as buyers sought to take advantage of the stamp duty holiday. The value of loans approved in December hit £22.3bn, the highest monthly level on record, while the value of loans across the year exceeded £171bn - the highest total since 2007. Separate BoE data shows that families stashed away an extra £170bn of savings last year, while debts such as credit card and car finance lending fell by £16.6bn over the year. The figures also reveal that deposits in bank and building society accounts rose by almost £21bn in December, whereas pre-pandemic they typically increased by about £5bn a month.
TSB announces £204m loss
TSB has reported a statutory loss before tax of £204.6m for last year, compared to a £46m profit in the year earlier period. The results show the lender took impairment charges of £164m and was hit by a near doubling in restructuring costs arising from its three-year strategic plan to improve its digital channels and close a number of branches. While TSB saw a £90.1m drop in income driven by reduced overdraft income, lower interest rates and a fall in consumer spending, consumer lending rose 7.2% to £33.3bn while customer deposits climbed 13.9% to £34.4bn. Chief executive Debbie Crosbie commented: “We're ahead of plan in delivery of our strategy and have relaunched our brand, all of which sets us up well for the future”, but noted that the impact of the coronavirus pandemic and the additional cost of restructuring “overshadows” the financial result for the year.
Osborne to become full-time banker
Former Chancellor George Osborne is to become a partner at the investment bank Robey Warshaw. He will step down as editor-in-chief of the Evening Standard and exit a role as an advisor at fund manager BlackRock
London IPO for Digital 9 Infrastructure
Investment trust Digital 9 Infrastructure is launching a £400m IPO as it seeks to invest in various digital infrastructure assets.
HSBC sets up private banking business in Thailand
HSBC has set up a new private banking business in Thailand, marking its second onshore expansion in south-east Asia. The HSBC team in Thailand will cover client management and advisory services while clients' assets will be booked in HSBC Private Banking in Singapore, a regional wealth management hub.
Ryanair posts record annual loss
Ryanair has reported a €306m (£222.6m) loss for 2020, as most of its fleet was grounded throughout the coronavirus pandemic. Full year capacity targets have been reduced accordingly to between 26m and 30m passengers, down from the 35m previously guided. The budget carrier forecasts a return to 25% capacity from April to June, and between 50% and 70% from July to September.
EU urged to offer City post-Brexit access
Lobby group TheCityUK has called on EU officials to grant Britain’s financial services firms wide-ranging post-Brexit access, calling for the bloc to grant regulatory equivalence to the sector. TheCityUK said the EU should unilaterally grant equivalence for UK finance firms as it is “in the interests of customers and clients in the EU”. It has also urged the UK Government to offer greater clarity on what future financial regulatory cooperation will look like post-Brexit. TheCityUK chief executive Miles Celic said: “The industry is as eager to see structured regulatory cooperation on financial services between the UK and the EU, as it is to prevent cross-border barriers to justice and ensure certainty on the movement of data.”
MPs told to consider ‘consequences’ for Bailey over LCF collapse
Dame Elizabeth Gloster has told MPs that the Treasury must consider whether Bank of England governor Andrew Bailey should face “consequences” over the mishandling of the London Capital & Finance (LCF) scandal in his previous role as chief executive of the Financial Conduct Authority (FCA). Dame Elizabeth, the former High Court judge who led an independent inquiry into the collapse of LCF, said the FCA and Treasury “should give consideration as to what they consider it is appropriate to do in the light of the serious criticisms and conclusions” in her report. Dame Elizabeth also said Mr Bailey and other senior regulators showed a "lack of judgment" by asking not to be named in her report. The inquiry concluded that the FCA failed to properly supervise and regulate LCF before its collapse.
Melvin Capital in $2.75bn cash injection
Melvin Capital, the hedge fund at the centre of a recent controversy which saw it short US video game store GameStop, has received a $2.75bn cash injection from Point72 Asset Management and Citadel after sustaining a $4.5bn decrease in its assets last month to $8bn. Reuters quotes one source as saying: “The fund’s portfolio liquidity is strong. Use of leverage is at the lowest level since Melvin Capital’s inception in 2014.”
Hargreaves Lansdown benefits from wave of young retail traders
Hargreaves Lansdown has reported a pre-tax profit of £188m for the six months to December, with assets under administration up 15% to £121bn.
Julius Baer benefits from surge in trading by wealthy customers
Julius Baer increased net profits by 50% last year, while raising its dividend 17% to SFr1.75 per share. Net interest income meanwhile fell 22% throughout the year.
Pharma firm appoints administrator
Senzer, a pharmaceutical firm which developed and manufactured respiratory devices for medical cannabis use, has appointed administrators. The company failed to get enough backing to float on the Alternative Investment Market.
Manufacturing activity slows to three-month low
The IHS Markit/CIPS Purchasing Managers’ Index declined to 54.1 in January from 57.5 in December, as manufacturing growth slowed to its lowest rate in three months. The score was higher than analyst estimates of 52.9 on an index where any reading above 50 shows growth. IHS Markit director Rob Dobson, who warned that the UK’s manufacturing sector “has come close to stalling”, said “a mixture of harsher COVID-19 restrictions and Brexit led to near-record supply-chain disruptions, lower exports and increased costs”.
MEDIA AND ENTERTAINMENT
Nintendo sees profits rise
Nintendo saw its April to December profit increase to 376.6bn yen from 196bn yen in 2019, as the Japanese video game firm reported a rise in its Switch games console sales of over 10% to 26.5m. The firm’s full-year profit forecast was raised 24% to 560bn yen.
Management buyout at the New European
A management buyout of the New European has been backed by a consortium including former New York Times chief executive Mark Thompson and former Financial Times editor Lionel Barber.
Firms expect to shrink office footprint
A poll of more than 275 business leaders shows that over a third of UK mid-sized firms expect to reduce their office space. Of those who said they expect to reduce their occupied space, 74% anticipate reducing their office footprint by as much as a quarter, while 12% say they are likely to reduce their space by up to half.
Asos to buy several Arcadia brands
Asos will acquire the Topshop, Topman, Miss Selfridge and HIIT brands from Arcadia for £265m and will pay £65m for current and pre-ordered stock. Only 300 staff will be saved as part of the deal, meaning 2,500 redundancies, and Asos, which only operates online, has not bought any of the brands’ stores. Arcadia's administrator confirmed the Asos deal and also said other Arcadia brands Burton, Dorothy Perkins and Wallis were in exclusive discussions with a potential buyer.
Ministers urged to work with business on lockdown exit
The CBI has called on the Government to work with the private sector to formulate a strategy for reopening the economy post-lockdown. The business body has written to Business Secretary Kwasi Kwarteng, urging ministers to outline a lockdown exit strategy, calling for details including what will be considered high or low-risk economic activity, whether there will be a return to tiered restrictions and what conditions need to be met to ease restrictions further. The letter also calls for further detail on the Government’s vaccination strategy and how officials will create “bespoke” reopening plans for industries most affected by the pandemic. CBI director-general Tony Danker told Mr Kwarteng there is “huge appetite among businesses to help the government create and deliver a roadmap out of lockdown that lasts, has national consensus and kick-starts our economic recovery as 2021 unfolds.”
Sunak to detail economic recovery plan
Chancellor Rishi Sunak is to unveil a plan for economic recovery ahead of his March 3 budget, with this expected to outline a medium-term investment and skills strategy. A source close to Mr Sunak said the Chancellor expects the medium-term strategy to be the final immediate term support package set out as part of emergency government support in the wake of the pandemic.